Fall Statement: Business generally up, but pandemic remains | Business News

Pre-publicity for the chancellor’s autumn statement, which claimed it would “boost” economic growth, demonstrated a lack of original metaphors and a tendency for exaggeration from the Treasury press office.

With the Office for Budget Responsibility (OBR) downgrading its forecasts, it is clear that the UK economy is not going to set any speed records, leaving Jeremy Hunt with rather limited options.

But from the white vans of the self-employed to the excavators and cranes of industry, there is much to welcome economic boosters in the 110 “pro-growth” measures, many of which are tax breaks.

Latest politics: All the reactions to the chancellor’s autumn statement

The plan is urgently needed, not just for the government’s credibility but for an economy that is currently unable to meet personal or public spending ambitions.

From Brexit to the mini-budget, from HS2 to the net zero target, the Conservative government has been eroding business confidence, with uncertainty and inconsistency undermining stability, the most important asset a country can offer investors.

The most important and expensive measures here aim to directly address this problem.

“Full expensing” allows companies to claim back 100% of their investment in plant, machinery and IT equipment under corporation tax, equivalent to a tax relief of £250,000 for every £1 million spent.

So far the bill is temporary and is due to expire in 2026. Making it permanent would allow businesses to make medium and long-term plans and cost the Treasury £10bn.

This is the biggest request from conglomerates, and they are grateful for it.

read more:
The Chancellor’s important announcements at a glance
Calculator: Are you worse off or better off?

Rain Newton-Smith of the newly reinstated CBI said it would “help the UK remain an international leader in investment incentives”, while Stephen Phipson, chief executive of manufacturers group Make UK Stephen Phipson called it “a bold statement” that would help address the “Achilles’ heel” of uncertainty.

The energy industry has taken concrete steps to help achieve the low-carbon transition, pledging to speed up grid expansion planning, compensate affected local communities and speed up the connections needed to connect renewable energy to consumers who need it.

There are also new investments targeting innovative life sciences and technology industries, as well as automotive and aerospace companies working on green technologies.

Small business groups are largely happy, too. National insurance cuts for the self-employed could be worth £500 to small traders and could ease dissatisfaction over the Treasury’s poor performance during the coronavirus pandemic.

However, approval of Mr Hunt’s measures is not universal and there are clear lines between them, mainly in the services sector, which is affected by business rates.

Interest rates have been frozen or lowered for three years since the pandemic hit, but are now starting to ease.

In a win for the hospitality industry, the 75% tax break for small venues with a rateable value of less than £110,000 has been extended for a year, offsetting some of the cost of the minimum wage increase in the sector where wages account for 60% of staff wages. cost.

However, there has been no similar respite for big companies, with Hunt announcing that a £14.5bn three-year freeze on interest rates will now rise in line with inflation.

The decision was taken by the British Retail Consortium, which represents major supermarkets, which called the move a “sell-off” and said it would add to inflationary pressures.

Almost all business people agree that the answer is long-committed and long-awaited reform of the interest rates system – the kind of real long-term reform that this government and the Chancellor have run out of time to consider.